A recent Gallup poll found that 41% of Democrats, 54% of Republicans & 55% of Independents  believe that 50¢ of every dollar of federal spending is “wasted”. This is a reflection on politicians & on the way they have managed, & continue to manage,  the political process  and helps to explain the growing cynicism among the hoi polloi with regard to the process & the people in it. It won’t be helped by recent revelations that about twenty past & present members of Congress are under investigation for a variety of things that may not pass the ‘smell test’. The booby prize likely goes to Rep. Charles Rangel (D.-NY), the Chairman of the powerful House Ways & Means Committee, who lives in no fewer than four rent-controlled apartments in New York while for tax purposes listing Washington as his residence, who failed to declare US$75,000 on rental income from a beach house he owns in the Dominican Republic, and who in the 38 years he has been in Congress on 28 separate occasions didn’t file the required reports on his assets. Their number also includes almost half the members of the House Appropriations Sub-Committee on Defence Spending. 

Corruption became so much of an issue in the recent mayoralty election in Montreal that one local expert on municipal governance commented “The population is fed up ... We need good stewardship and we don’t have it” & an official of the polling firm Angus Reid that “they’re going to deal with an electorate with a very cynical view toward the ... administration”). Allegations of corruption aside, such feelings are becoming more & more commonplace  in Western democracies as the hoi polloi become increasingly fed up with politicians who seem more interested in their own agendas, rather than John Q. Public’s. 

When Man seeks to micro-manage nature the outcome is often as expected. For “you get rid of wolves & get more coyotes, get rid of sharks & get more jelly fish, and get rid of lions & end up with more baboons; and usually the smaller predators are more of a problem than the bigger ones ever were”. On the other hand, re-introducing wolves into Yellowstone Park seems to have had a beneficial impact (even if if the ranchers in the surrounding country don’t agree) : it has reduced, & ended the fluctuations in, the coyote population, and stabilized the bison- & elk populations by weeding out the weak and/or no longer productive (in that respect they are more useful than hunters; for they feed at the bottom of the gene pool, while hunters do so at the top, the trophy animals, which are the genetic ‘stars’). 

As Americans are saving more, Canadians aren’t. In fact, household debt as a % of personal disposable income rose 3.4% in Canada  in the First Half to 140%, up 7% YoY.  

CNNMoney on October 31^st asked its listeners to report back on the question “How strong is the economic recovery in your area?”. 5% said “Very Strong”, 31% “Small Signs of a Rebound” & 65% “No Recovery Here”. 

700 years ago China was home to one-third of the world’s 300MM inhabitants & had its largest economy, with India not too far behind; so ‘l’histoire se répète’. 

In Alberta the government both the swine flu vaccination program by not setting priorities. This has brought out the worst in many Albertans. People over the age of 50 have a degree of natural immunity from their younger years because until 1957 H1N1 was the common flu strain, and therefore are not deemed ‘high priority’. But this hasn’t stopped numerous members of the Boomer ‘entitlement generation’ to flood the clinics. So now the Province has run out of vaccine. At a more general level, it is amazing that people somehow had the mistaken idea it would be possible to vaccinate everybody on Day One.  

GLEANINGS VERSION II

No. 335SP- November 13^th, 2009 

WHY WE’LL NEVER CUT SPENDING (Forbes, Bruce Bartlett) 

∙ We can’t solve the federal deficit by cutting spending. 62% is mandatory (entitlements & interest on the national debt). Defence takes over half the rest. Last year the residual would have been US$485BN while the deficit was US$459BN; i.e. US$26BN would have been left for all other government services from education through air traffic control to the FBI. And “The elderly will fight anyone who tries to cut their benefits, even as they hypocritically ... demand fiscal responsibility”, and their political power will grow as the population ages. 

So Americans, Social Security recipients & the military-industrial complex will be in for a rude shock. As far as the ‘growing power’ of the predominantly white retired age cohort is concerned, it may be outstripped by that of the non-white, still-working younger voters, often with young families. 

A DOLLAR CRISIS : NOT AROUND THE CORNER, BUT STILL A HUGE RISK

(Daily Star, Ken Rogoff) 

∙ The Chinese sit on US$2+TR. They should look at Europe’s experience in the 70's.  It too amassed huge amounts of US T-Bills to prop up the then prevailing system & all it got for its efforts was a calamitous rise in inflation. At Pittsburgh the G-20 leaders agreed to keep this from happening again & promised to “scale back” global imbalances. The good news is that they recognize the need & the bad news that we’ve heard this talk before.

∙ It took the financial crisis to slow the American borrowing train. Once 7% of GDP, the current account deficit, is now 3%. But when the economy turns around, America’s appetite for foreign goods will surge again (a questionable assumption?). So it is hard to see how Washington can meet its Pittsburgh pledge, hence the change must come from China; for it has most to lose from a dollar debacle. A dollar crisis is not imminent but certainly a huge risk over the next 5-10 years. 

Forty years ago the deficit countries also argued it was up to the surplus countries to do the heavy lifting (& vice versa). The same column ran in the Globe and Mail but with a catchier heading : “It’s up to China to avert a dollar debacle”.(Rogoff teaches at Harvard & once was the IMF’s Chief Economist, and his is a rather straight line-thinking, US-centric argument). 

WHAT HAPPENS IF THE DOLLAR CRASHES? (BW, Peter Coy) 

∙ The dollar has slid 15% since March against a basket of currencies (& by 30% against the Brazilian & Australian currencies, and 21% against the Canadian dollar). So the common wisdom is that now it’s cheap & due for a rebound since “Currencies don’t go much more than 20 percent from their long-term averages in real [inflation-adjusted] terms.”

∙ But since, as UK economists told Queen Elizabeth, the reason the housing bust was so devastating was a ‘failure of imagination’, let’s assume the dollar dropped another 25%. This would make it easier for US manufacturers to compete globally & encourage more foreign tourists to come to the US, but would also cause US inflation to zoom due to the high costs of imports, and create problems for Americans in getting credit & for those US banks that assume a dollar bust won’t be allowed to happen. So, federal regulators now monitor banks for their exposure to a possible dollar bust, “not quarter to quarter ... (but) hour to hour and minute to minute”. Unfortunately, as Warren Buffett once quipped, “You only really find out who is swimming naked when the tide goes out.”

∙ If the Administration doesn’t seem perturbed by the dollar slide (which in part is due to foreign central banks diversifying their reserves, albeit still only by stealth rather than on a  “get me out of here at any price” basis), this would change overnight if financial markets sensed it might turn into a rout. And the ‘pass-through’ effect of higher import prices may be faster (& greater) than hitherto assumed since new research at Columbia University found  past analysis thereof was based on poor data. It would be disastrous if the Fed had to raise interest rates to cool inflation or defend the dollar when growth was still weak. And a dollar plunge could have a devastating impact on the five big US banks that account for 89% of the total risk in the derivatives market. 

It’s not a happy event when such talk pops up in the popular press. The volume of derivatives outstanding runs in the hundreds of trillions of dollars & losses equal to only a tiny share of their face value could seriously erode the US banking system’s equity base. Unlike the recent financial crisis, in a US dollar crisis there won’t be an “angel” for a bailout. At turning points markets never move at forecasters’ measured pace, but in leaps & bounds. Government financial experts tend to overestimate their ability to control events & underestimate potential impact of the vast amounts of trade-related money sloshing around in financial markets : after SDRs came into being on January 1^st, 1970, one of them said : “Bring on the speculators, we now have  more money than they do”. And yet, just 20 ½ months later, the Bretton Woods international monetary structure came crashing down. Now, four decades later, global trade flows are exponentially larger.  

FUND MANAGER COMMITS SELFLESS ACT (Fortune, Allan Sloan) 

∙ Effective last July 1^st the family-owned & operated Davis Group of mutual funds vut its management fees from an already rock-bottom 0.65-0.75% to a maximum of 0.55% (in the process walking away from US$3.3MM/year). Chris Davis, the third generation family member running the group explained “It was the right thing to do.” An example of Wall Street ‘doing good’; next we’ll see the sun rising in the West. 

And yet, Canadians passively let their fund managers typically ‘scalp’ them for 2½ %.  

GAS EXTRACTION METHOD COULD INCREASE GLOBAL SUPPLY

(NYT, Clifford Krauss) 

∙ Oil engineers & geologists are flocking to Texas, Oklahoma & Pennsylvania to learn about fracturing shale formations to unlock the natural gas therein. Shale gas could boost global gas reserves by up to 160%, and reduce Europe’s dependence on Russian gas (since there are large shale beds near major European cities) & China’s & India’s dependence on burning coal to meet their burgeoning demand for electricity.  

Gas-fired power plants nicely complement solar- & wind plants : while the latters’ output depends on uncontrollable & volatile climatic conditions, the former can be turned off & on almost at will.   

THE PATH TO DOWNWARD MOBILITY (NW, Robert J. Samuelson) 

∙ For Americans progress means each generation ‘living better’ than the last. But that may become a mirage. People expect future growth to fund more spending on healthcare and higher living standards (the ‘butter and guns’ idea so dear to politicians). But Moody’s expects only 70% growth in real US GDP by 2030, i.e.  annual growth of just 2.4%, vs. 3.1% between 1980 & 2005 and, with 25% more people, this means just 1.4% annual per capita growth. Furthermore, if, as it assumes, health spending continues to grow 2% faster than GDP - the 1975-2005 trend  rate - this will eat up most of that GDP growth.

∙ Downward mobility would be driven by higher taxes to pay for healthcare spending,  underfunded public sector pension plans & Social Security programs, and repairing aging infrastructure, and by lower take-home pay, higher energy prices & a rapidly growing national debt service burden. While better healthcare enhances a nation’s well-being, it also involves major transfers of wealth within & between generations :  according to a report by the Kaiser Family Foundation the healthiest 50% of Americans account for 3%, the sickest 15% for nearly 75%, and those over 55 for half of all annual healthcare spending. 

The ‘higher taxes to pay for healthcare’ argument may be irrelevant if the hoi polloi were to ‘gain on the swings what they lost on the roundabouts’, from lower out-of-pocket health care costs. Still, the other factors he references will be enough to fulfil his prediction, especially since much of Americans’ high discretionary spending, that funds the ‘good life’ , is due to under-priced food, water & energy (none of which may remain so much longer). And in the either/or world of economics, every additional dollar spent on health care means one dollar less available for funding other things, incl. education. This brings up an uncomfortable question : what would be of greater benefit to the US in the 21^st century, longer living-, or better-educated-,  people?  

THE UNEDUCATED NORTH AMERICAN (NYT, Paul Krugman) 

∙ In the 19^th century America led the world in universal basic education. Then, as other nations followed suit, we initiated the “high school revolution” of the early 20^th century &, finally, after WW II, established a commanding lead in higher education.  But while this was overwhelmingly a matter of public education, in the past 30 years our dominant political dogma has been that government spending is a waste of taxpayers’ money.

∙ While most people still think of America as the great land of college education, the reality is that we now have a college graduation rate slightly below the average of the advanced economies. And while before the financial crisis this was deteriorating further because we made it financially so difficult for people to stay in school, the crisis has placed additional stress on our already creaking educational system. Many of the jobs lost have been in education since the state & local governments that fund it are in dire fiscal straits.  We need to wake up & realize that one of the keys to our nation’s success is now a wasting asset. 

His argument is OK, but only up to a point. For he focuses on its quantitative aspects while  the real problem lies in its qualitative aspects. China & India each year graduate more students in engineering & the sciences than are enrolled in all of American universities’ engineering & science faculties, Frequently the teaching staff in those faculties largely consists of people who, while they did their graduate work in US universities, received all their prior education in places other than the US educational system (& many of them have now quit coming or, once their graduate studies are completed, can see better opportunities for themselves in the country of their birth than in North America.. And perhaps most importantly, political correctness, & students’ sense of entitlement to good marks because “they worked hard”, has led to a‘dumbing down’ of the system that won’t stand the country in good stead. It is interesting to note in this context that in a recent listing of ‘The World’s Best 100 Universities’, both Asia & Europe gained, & America lost, ground. 

CLEANSING THE AIR AT THE EXPENSE OF THE WATERWAYS

(NYT, Charles Duhigg) 

∙ Three years ago, in response to public pressure & a law suit by five states, Allegheny Energy decided to install scrubbers at its Masontown, Pa., coal-fired power plant. By spraying water & chemicals through its chimneys these would each year remove from exhaust gases 150,000 tonnes of the pollutants that were blamed for causing local residents respiratory problems. But since their start-up in June the company has been dumping the resultant chemical-laden waste water into the Monogahela River, the water source for 350,000 people, causing one local to observe “they decided to spare us having to breathe in these poisons ... now we have to drink them instead.” The EPA estimates that by next year half the coal-generated power in the US will come from scrubber-equipped plants. 

Cleaning air to poison water makes about as much sense as first producing huge amounts of CO2 & then spending huge amounts of money on underground sequestration. This will come back to haunt the US as clean water becomes increasingly a more precious commodity. 

CHEVRON SQUEEZES NEW OIL FROM OLD WELLS (WSJ, Ben Casselman) 

∙ Since 1899 the Kern field, 100 miles  Northwest of Los Angeles, has produced 2+BN bbls. But Chevron estimates another 1½ BN bbls is left. So it is testing new, sophisticated enhanced recovery techniques there to profitably produce more of the remaining oil. While this hasn’t reversed the field’s declining production trend, it has cut its attrition rate from 7% to 2% & led it to believe it can recover 80% of the oil in place (vs. an industry norm of 30% & a 99% rate in Alberta’s Leduc No. 1 field). Occidental Petroleum has similarly extended field life in Oman, Columbia & West Texas by injecting CO2, steam & other substances into old oil reservoirs and its CEO says, that with fewer new fields being discovered,“It’s not how many new fields get discovered. It’s keeping the base decline under control.” 

As discoveries are increasingly made in ‘frontier regions’ with high development- & production cost structures, it becomes increasingly worthwhile to ‘rework’ old fields to recover the oil known to have been left in place in the first go-around, or to develop oil reservoirs that have long been known to exist but couldn’t be developed with yesteryear’s prices & technologies (such as the Bakken formation underneath Montana, the Dakotas & Saskatchewan, the existence of which was known for 50 years which the US Geological Survey believes may hold as much oil as Saudi Arabia).  

A WATER WAR SLOWS SOME WATER PROJECTS (NYT, Todd Woody) 

∙ Last year a German firm announced plans for two solar farms in Nevada’s rural Amargosa Valley. But its need for 1.3BN gallons of water a year for cooling purposes, 20% of that available in the valley, is pitting locals who want to sell their water rights to it against those who worry about the project’s environmental impact (& likely have no water rights to sell). This illustrates an “inconvenient truth” about renewable energy : its need for vast  amounts of water :  “Water could become the real throttle on renewable energy.”

∙ There are two solar power technologies. In ‘wet cooling’ hot water flows through a cooling tower, removing its heat & evaporating some of the water. ’Dry cooling’ uses fans & heat exchangers, and water only for panel-washing, but has higher operating costs. In California 35 solar plants with a total capacity of 12,000 MW are on the drawing board, with ’wet’ proposals needing 500-800MM gallons of water/year each & dry ones just 12-25MM. 

In much of the Western US all available water is already allocated. So newcomers must buy water rights from those who own them. If they are irrigation farmers, this will affect the nation’s food supply. 

HAWAII REGULATORS APPROVE FIRST US TUNA FARM (AP) 

∙ A start-up, Hawaii Oceanic Technology, has received permission from the state’s Board of Land and Resources to build the first US tuna farm three miles (5kms) off Big Island in 1,400 ft (300+ metres)-deep water. It says it will be environmentally-friendly & avoid the disease problems that have plagued other fish farms because its pens will be large, so the fish won’t be densely packed (in salmon farms there can be as many as 50,000 fish in a 30 metre by 30 metre pen), and strong currents at the site will sweep away fish waste & uneaten fish food, and thus avoid ocean floor pollution. It expects to produce 6,000 tons of big eye tuna (vs. the 200,000 tons caught in the Pacific each year) & contribute US$120MM to the local economy,  6x that of all fish farms in Hawaii combined. Its critics worry about diseased fish escaping & contaminating wild stocks, about the source of its feed (the company says it will purchase only feed made from “sustainable harvested” fish & won’t use any antibiotics). They say “this is not a farm ... it is an industrial feedlot” and claim that, if is must import all its feed & export 90% of its production, it won’t be economically viable. 

Promises made at this stage, especially by start-ups, are meaningless. There are few, if any, wild fish stocks that are being “sustainably harvested” and, if there are, they won’t be for long. Few consumers realize that half the fish on supermarket shelves comes from fish farms (& may be nowhere near as healthy a food source as they are being led to believe). 

CARNEGIE HALL STAGEHANDS ARE PAID LIKE STARS (Bloomberg) 

∙ Stage hands move equipment, prepare stages for performances and operate audio-visual & sound equipment. It has a full-time stage crew of five, the lead hand of last year took home US$530,044 in salary & benefits while the other four averaged US$430,543. 

And these people went on strike in November 2007? Pity the poor star pianist who, after much practicing, may get US$20,000 tops for a performance.  

TEXAS, OTHERS TALK SECESSION (McLatchy Newspapers). 

∙ The Governor of Texas recently noted some Texans advocate seceding from the Union to once again become an independent republic. And secession movements have sprung up in over a dozen states, incl. the Second Vermont Republic Movement in the East & the “Republic of Cascadia” movement on the West Coast (that wants to create a separate country out of Oregon, Washington & British Columbia). And states too are challenging Washington (Montana, Tennessee & four other states have enacted Fire Arms Freedom Acts saying that weapons made & kept in their states are beyond the authority of the federal government, & Arizona lawmakers have proposed a referendum on a state constitutional amendment to let it opt out of any federal healthcare legislation).  

Centrifugal forces & tribal allegiances are on the upswing everywhere in our global village. 

GREEN ROOFS OFFSET GLOBAL WARMING (Discovery Channel). 

∙ In Metropolitan Detroit there are 65-85MM square metres of potential green roof space. Researchers at Michigan State University measured the amount of carbon sequestered by vegetation on 12 green roofs in Michigan & Maryland & found it averaged only .375kg per square metre which after two years is offset by that emitted by decaying plant material. But they also cut air-conditioning costs in summer, heating costs in winter & energy consumption year-around. Municipal governments like them since they reduce water flows into sewage systems during rain storms. They reduce air & sound pollution and provide animal habitat. And they have a 3x longer useful life than traditional roofs. But developers don’t like them since they are at least twice as costly to install as traditional roofs. 

The parking arcade of Toronto’s Manulife Centre has a 25 year-old green roof on which there are three storey-high mature trees & York University installed a 30,000 sf green roof on its new Computer Science Building. In Chicago, where in 2008 539,000 sf (12½ acres) of green roofs were installed, there was an inter-union squabble this year between an Operating Engineers’ local representing landscapers & a Teamsters’ local representing roofers as to who should install them (which the former won, to the relief of developers since their hourly base wage rate is US$16, vs. the roofers’ US$30). And the ‘urban farming’ possibilities of green roofs are limited only by one’s imagination, incl. bee keeping, herb & community gardens & even raising rabbits for meat. 

TAPPED OUT (G&M, Martin Mittelstaedt)

∙ A WWF-Canada report, Canada’s Rivers at Risk, based on 300+ scientific reports, warns Canada’s major rivers are in, or headed for, trouble. Among the former are the St. Lawrence in Canada’s heartland & the South Saskatchewan, the water source for Southern Alberta, & among the latter the Athabasca River (that the oilsands operators are bleeding dry).  

None of this should surprise anyone.   

WHO CONTAMINATED CANADA’S CROPS? (G&M. Martin Mittelstaedt) 

∙ Europe, that rightly or wrongly is paranoid about GM food products, has slammed the door on flaxseed from Canada (worth $320MM/year to Canadian, mostly Western, farmers). For it found  minute amounts (about one seed in 10,000) of a herbicide-resistant GM variety, which since has shown up in 34 countries. How it got there has people puzzled. It was developed at the University of Saskatchewan in the 90's but never distributed commercially (although the developer was known to have given packages of the seeds away for “educational purposes” to people promising not to grow them (which suggests an incredible naivete about human behaviour - for why take some if you are not going to experiment a bit with it?) & all the seeds were supposedly destroyed in 2001. 

Canada’s grain handling system is archaic & should be completely re-jigged. Traditionally, grain goes from the farm to a rail siding, from where, intermingled with everybody else’s, it goes by rail to a port, where it is cleaned & graded, and put in the hold of ships that take it overseas. This is basically the way it has been done since the days of the Greeks & Romans. But we live in an age of containerization. So the efficient way now, & one that would permit better quality control, would be to bring containers right to the farm yard where the farmer would do the cleaning before filling the container. This would reduce the labour intensity of grain handling (since it would never have to be handled again until it reached its destination, enable growers to capture the value-added currently benefiting unionized port workers & make tracing contamination as easy as falling off a log. But the vested interests will fight such a change tooth & nail. 

STAFFING UP? IT’LL COST YOU (Financial Post Magazine) 

∙ An analysis by the Canadian Federation of Independent Business of 2006 census data shows federal pay scales average 17.3% more than similar private sector jobs. The gap is widest in Saskatoon (29.3%), lowest in Sudbury (5.3%) & 10.6% in Ottawa. 

This is due to its ‘postage stamp’ wage negotiation practice whereby remuneration is the same across the country despite often monumental differences in  living costs (much of it due to housing costs). These findings are in line with those from other sources. But it is based on base wage rates only; on a comprehensive employee cost basis  the gap would be much wider. 

MOUNTIES TO STOP AIMING TASERS AT CHESTS (G&M, Daniel LeBlanc) 

∙ As of October 9^th, they can no longer taser people in the chest area, the centre of the body mass, as they have long been trained to do. This came after Taser International issued a directive in late September saying eliminating chest shots “avoids the controversy about whether [electronic devices] do or do not affect the human heart” (while maintaining “the risk of an adverse cardiac event” from taser use is “deemed to be extremely low.”) 

Truly an extraordinary about-face by a company that had denied in dozens of law suits the possibility of any  link between the use of tasers & tasered people having cardiac arrests (blaming that on “excited delirium”). Next it might be useful to teach all police officers to become better shots so that if they must use a fire arm, they need not aim at the centre of the body mass either. 

RCMP OFFICIAL WENT ON $44,000 TRAINING TRIP (OC, Glen McGregor) 

∙ The RCMP’s civilian Commissioner spent three days in July with Malandro Communication in Arizona, at a cost to the taxpayer of $44,000, for leadership training, executive coaching & the development of a “leadership action plan”, & intends to pay it another $220,000 to have it coach three other senior RCMP executives in leadership & accountability. An Ottawa watchdog questioned why such a seasoned bureaucrat should need leadership training 

The fact that senior RCMP officers could rise to near the top in the organization & still require leadership training may explain why the force, once justifiably a source of national pride, in recent decades has staggered from one example of poor management & training to another, with the nadir, for the time being at least, reached when four of its officers were recently found not to have told ‘the truth, the whole truth & nothing but the truth’ under oath in the inquiry of the fatal tasering of a Polish immigrant in the Vancouver International Airport a couple of years ago. 

CANADIAN YOUTH MORE FOOTLOSE THAN HOMEBODY AMERICANS

(CH, Vak Berenyi) 

∙ Pollster Ipsos Reid found Americans are “more traditional & domestic ... (and) interested in establishing a home base.” 39% of American 18-34 year-olds are married vs 25% in Canada but only 7% are in common law arrangements, vs. 18% in Canada. In this age cohort also 45% of the Americans owned their homes vs. 35% of Canadians, 19% had been abroad vs. 48% of Canadians, 68% had some post-secondary vs 76% of Canadians & 72% had “actively participated in a recycling program” vs. 88% of Canadians. 

This may help explain Americans’ apparently greater predilection towards isolationism.  

1 in 5 TEENS HAVE HEART DISEASE RISK (G&M, André Picard) 

∙ Research presented at the Canadian Cardiovascular Congress in Edmonton, involving 20.719 students in the Niagara region (of Ontario) tracked for the seven years, found that 17% had high blood pressure, 16% elevated cholesterol levels & 30% were either overweight or obese, and that only 22% reported meeting the recommended activity levels for their age group (90 minutes of activity 5x a week) & 24% spent 20 or more hours a week watching TV or playing video games. 

Not good news for the healthcare system down the road.

ALBERTA PROCESS TURNS WHEAT INTO BOARDS (EJ, Dave Cooper) 

∙ Two decades ago the Alberta Research Council pioneered the wood-chip Oriented Strand Board (OSB) plywood-like building panels that are now in common use throughout the North American construction industry. It has since developed Oriented Split Straw Board (OSSB)  that uses wheat straw instead of wood chips as its basic component and recently the first commercial-scale OSSB plant manufacturing it under license was opened by a Dutch firm in the region of Western China devastated by the 2008 earthquake. 

That’s all fine & dandy but, common to popular belief, wheat straw is not a ‘free good’. For, if removed from the field rather than incorporated into the soil, the farmer is giving up plant food material that he will have to replace from another source, first & foremost commercial fertilizer.  

COAL TOO DEEP TO BE MINED COULD BE BURNED UNDERGROUND (Reuters) 

∙ A conference in London was told that underground coal gasification (UCG) may be the next big breakthrough in expanding the world’s energy supply. It involves injecting air or oxygen into a deep coal seam & igniting it to produce a mix of hydrogen, methane & carbon dioxide that can be used to produce electricity or liquified gas. Over half of Germany’s coal reserves lie below 1,500 metres & Alberta has 600BN tonnes (100x the current global production) in its 1,400 metre-deep Mannville coal seam alone. So the Alberta Energy Research Institute has a demonstration UCG project underway in the Swan Hills area of Northern Alberta. But Gordon Couch from the IEA’s Clean Coal Centre warns that 50 years of trials have yet to demonstrate UCG’s commercial viability although conceding “Current pilots could result in commercial opportunities within five to seven years.”  

Necessity is the mother of invention. So when a need is demonstrated, inventions usually follow. A seemingly not dissimilar ‘in situ combustion’ process is already being tested in Alberta on a small scale commercial basis to produce oil from deep oilsands deposits in a more environmentally-friendly, less water-intensive manner than the current state-of-the-art Steam-Assisted-Gravity-Drainage (SAGD) methodology. If proven out, UCG may help China & India to meet their growing power demand with less environmental impact than at present.    

IT’S CRUNCH TIME IN DUBAI (AP, Adam Schreck) 

∙ The sheikdom & its network of state-owned firms accumulated debts of US$80+BN  during its drive to become a major financial-, trade- & tourism hub before its hydrocarbon reserves ran out. About US$50BN thereof is due within the next three years and investors are wondering, but by & large (not yet) worrying, how it might be refinanced or paid back. 

Like anyone else, the Emir didn’t foresee such a pervasive global economic downturn. 

GAS PIPELINE DRIVES POLITICAL WEDGE BETWEEN EUROPE

(NYT, Andrew E. Kramer) 

∙ The pipeline Moscow plans to run 750 miles on the bottom of the Baltic Sea from Vyborg, Russia to Greifswald in Germany is not just about increasing its capacity to move gas to Western Europe. It is also intended to give it more leverage over the Ukraine & the other former Central European members of the Soviet block by enabling Moscow to close down the existing pipeline across the Ukraine at will without infuriating Western Europe and to test the EU’s resolve to protect the interests of its newer, ex-Soviet block members.

 

The Social Democrat government of former German Chancellor Gerhard Schroeder approved a US$1.46BN loan guarantee for the pipeline shortly before he was turfed from office in 2005. Then, after the election he joined the consortium that will build the pipeline as its Chairman, claiming he hadn’t decided to do so until after the election & hadn’t been aware of the loan guarantee. 

CHINA MINERALS’  MONOPOLY A RISK BUT DEEMED IMPROBABLE

(Epoch Times) 

∙ China produces 95% of the ‘rare earth metals’ essential to the manufacture of many hitech products, incl. the batteries for hybrid cars & computer components and the ubiquitous high performance magnets in automobiles, consumer electronics & military hardware. Recently Beijing announced it might restrict the export of some & prohibit that of others altogether. But Prof. R.A. Henderson, a panel member of Earth Sciences at the Australian Research Council, believes this will just prompt other countries develop their own sources. 

A case in point is Bolivia. According to the US Geological Survey its known reserves of lithium are 1½x as large as Chile’s, 5x as large as China’s & 12x those of the US. But while President Evo Morales’ may have big ambitions, as the leader of the cottage industry that currently mines small amount of it, for his country to become “the Saudi Arabia of lithium”, he has none to give it away ‘on the cheap’ to foreign interests (&, given his antipathy to the US, especially not to a US firm).    

WHERE THE DUST BLOWS AND SETTLES (NYT, Editorial) 

∙ Last month an orange dust storm enveloped Eastern Australia. There is strong evidence  dust storms are on the increase & a strong possibility they will become more commonplace. In relative terms, it was tiny, involving just 5,000 tons of dust while in the Sahara & China dust storms can involve hundreds of thousands of tons. Dust storms are due to poor farming practices, loss of native ground cover & deforestation. Scientists worry diseases may be spread by the spores, viruses & bacteria carried along with the dust. While nothing much can be done about the winds that move the dust or the pervasive droughts that cause them, better water management & restoring native cover in semi-arid regions would help reduce the supply of dust. So reducing desertification is of critical importance to both the countries that raise the dust & those where it eventually settles, i.e. most of the world. 

In the 1930's a long drought turned what was then, & still is, Canada’s Western Prairies’ bread basket into a dust bowl. And today’s factory-farming cropping practices make a repeat thereof in the future less a possibility than a probability especially if the climate were to turn warmer/drier.

KENYA TRIES TO REGAIN ITS REPUTATION (G&M, Geoffrey York) 

∙ For decades Kenya was one of Africa’s leaders, capitalist, stable, middle income, democratic & a haven for tourists, and Kenyans felt quietly superior to other Africans. But nowadays corruption, violence, political paralysis & a wave of political murders means that it must now endure the indignity of having some analysts calling it “a failed state” & other Africans feeling sorry for it. Says John Githongo, one of the country’s best-known activists, whose father co-founded Transparency International & who himself had been head of its local chapter until recruited, following the December 2002 elections, by the then new President Mwai Kibaki to be in charge of the country’s anti-corruption campaign until, a couple of years later, he felt compelled to resign from that post by fax from London after his life had been threatened once too often for getting too close in his investigations to people in high places, “I feel very ashamed ... We feel a loss of confidence as Kenyans. We were the leaders, and now people are saying prayers for us.” 

“Middle income” is a bit of a stretch : Kenyan per capita GDP for many years after Independence in 1963 stagnated at roughly US$400, more or less, in part due to its very high rate of population growth. After the violence-fraught 2007 election former UN Secretary-General Kofi Annan mediated what amounted to a cease-fire until the 2012 election between the two principal proponents in the election, with Kibaki retaining the Presidency but relinquishing some power to the first-ever Prime Minister since Independence in 1963, Raila Odinga (whose father’s Presidential ambitions had been rubbed out by Kenyatta & Mbaki’s predecessor, Daniel arap Moi), a member of the same tribe & clan as President Obama’s late father. Then, he was pressured by the donors to head a ‘Panel of Eminent Persons’ to determine who had been behind for the post-election killing & raping. Several months ago he handed his report, naming names (supposedly including six Cabinet Ministers), to the President & Prime Minister, and to the International Court of Justice (ICC), threatening to make it public if the former did not act on it (which, even if they had wanted to - Kenyan politicians & officials are instinctive ‘stonewallers’ par excellence -, they have so far been prevented from doing by Parliament). At last report, the ICC’s Chief Prosecutor, Luis Moreno-Ocampo, had despatched a letter to the President, & the Prime Minister, suggesting they might invite the ICC to investigate (“a referral”) & try the kingpins of the post-election violence & asking them confirm that the Government would arrest suspects, should the ICC issue warrants for their arrest, or summons for them to appear before it (both of which they could agree to without a need for Parliamentary approval). While much of the country is now in the grasp of a prolonged drought, its economy did rather well prior to the 2007 elections, in part due to the growing Chinese involvement in the economy (one less desirable consequence of which was a sharp uptick in poaching for ivory & rhino horn).  

LIGHT AT NIGHT LINKED TO DEPRESSION (LAT, Shari Roan) 

∙ A study by Ohio State U. researchers, presented at the Society for Neuroscience’s Annual Meeting, showed mice that lived 24/7 in a lighted room exhibited more signs of depression than those in a more normal light-dark cycle environment, but that, if they had access to a dark corner, they showed fewer signs of depression (for those who wonder how depression levels in mice are measured, it’s by the amount of sugar water they drink). This adds to a growing body of research that our bodies’ so-called circadian rhythms affect our health. 

Earlier it was found that women shift workers have higher-than-average rates of breast cancer. 

HAS THE WAR ON CHOLESTEROL CAUSED MORE AUTISM?

(Yukon News, Barbara Mcleod) 

∙ For decades we were told to cut out cholesterol for health reasons. But a recent US study found that adding it to the diets of autistic kids led to dramatic improvements in their health, behaviour & performance. This caused Dr. William Shaw, Director of the Kansas-based Great Plains Laboratory for Health, Metabolism and Nutrition to comment “the cholesterol story is one of the most exciting things ... in the field of autism.” (an earlier John Hopkins University study found that one-half to two-thirds of autistic children were abnormally- to dangerously deficient in cholesterol).  

The genetic make-up of some people apparently causes them to “sluff off” any excess cholesterol intake while that of others causes them to manufacture cholesterol from other fats if their intake is too low. Food fads have a lousy track record : once butter was bad & margarine good but now nutritionists aren’t so sure anymore, once all cholesterol was bad & now we differentiate between “good” & “bad” cholesterol, once all transfat was bad & now that in milk is supposedly OK (it’s just the artificial kind that is bad), and while once people were told it was essential to drink eight glasses of water a day, now the ‘scientific’ basis thereof is questioned. The only way not to be whiplashed by food fads that come & go with possibly adverse long-term consequences, is to ignore them, & the ‘experts’ that propound them, and to think ‘balance’.